Zimbabwe's diamond deal sparks controversy

Published: 4 hours ago

Executives at Zimbabwe's state-owned diamond and mineral marketing companies have plunged the country's mineral wealth into turmoil after signing a multi-million-dollar agreement with a loss-making Dubai-based firm, the Zimbabwe Independent can reveal.

The secretive tripartite deal, inked in August between the Zimbabwe Consolidated Diamond Company (ZCDC), the Minerals Marketing Corporation of Zimbabwe (MMCZ), and TransAtlantic Gem Sales FZCO (TAGS), was intended to facilitate offshore diamond sales. However, allegations of corruption, negligence, and reckless decision-making have since engulfed the arrangement, with due diligence only conducted after the contract was signed, exposing TAGS as a financially troubled company.

Highly placed sources said the agreement bypassed essential board approvals from both ZCDC and MMCZ, breaching basic corporate governance standards. "In their rush for profit, the executives neglected standard protocols, a lapse that would soon come back to haunt them," a source familiar with the matter told the Independent. "No due diligence was done and it was only realised when the first diamond parcel was supposed to be shipped out when an MMCZ official raised questions on the financial standing of TAGS."

The revelations triggered an emergency response from the Office of the President and Cabinet (OPC), which moved to try and block the transaction. However, with the contract already binding, the OPC's capacity to reverse the deal is limited. "Unfortunately, there is a contract in place and OPC cannot really do anything," the source said, noting that 1.6 million carats of diamonds are already prepared for shipment under the arrangement.

Following the alarm, MMCZ and ZCDC officials were dispatched to Dubai to assess TAGS's financial standing. During this visit, an MMCZ official conducted a long-overdue due diligence that uncovered troubling details. A letter from MMCZ general manager Nomusa Moyo to ZCDC chief executive Douglas Zimbango, dated October 7, 2025, outlines that TAGS had operated at a loss for the past two consecutive years, with current liabilities exceeding assets and bank statements showing a very low balance. Moyo warned that the company might fail to remit proceeds from diamond sales, and that efforts to recover funds could prove difficult.

TAGS's audited financial statements for the year ending February 28, 2025, confirmed the risks, revealing a net loss of US$507,675, following a US$783,046 loss the previous year. The company's current assets of US$447,145 were dwarfed by current liabilities of US$1,304,068, highlighting its precarious financial position.

In response, Zimbango acknowledged the risks but insisted the contract contained safeguards to protect national interests. He highlighted clauses ensuring TAGS "holds no ownership of the diamonds" and maintains full insurance coverage. Zimbango also proposed an escrow account mechanism to secure sales proceeds, describing it as the "most cost-effective and operationally practical" solution. TAGS founder Anthony Peter pledged to open a joint-signatory account with ZCDC, requiring authorisation from both parties for any fund movement.

Despite these assurances, senior government sources warn that the damage may already be done. The decision to sign a binding agreement with a financially unstable partner before conducting due diligence has placed Zimbabwe's diamond wealth at serious risk, raising fears of financial loss and international embarrassment if TAGS fails to remit proceeds from sales.

"The stakes are high," a source at the OPC said. "There is grave concern within government circles that Zimbabwe's precious diamond wealth may be lost to a dubious deal, signed in haste and now threatening to inflict immense financial and reputational damage."
- Zimbabwe Independent

Tags: Diamonds,